RIM seeks $32m for iron ore shift

Mining and investment firm
RIM
Capital has mandated Southern Cross Equities to raise up to $32 million to complete its transformation into an iron ore company.

RIM shares were suspended last week after a shareholder vote to approve the capital raising and the purchase of private company Cabral Resources. Cabral’s main asset is an option to buy nine iron ore tenements in the Brazilian state of Bahia.

RIM, which has a market capitalisation of $25 million, is believed to be starting an international roadshow this week to drum up support for the share placement, which will be priced at 20¢ a share.

The company must pay $5.5 million in shares to buy Cabral and $7.2 million in cash to exercise an option over the tenements. The balance of the funds raised will be allocated to development and exploration of the projects.

With exploration and some consolidation, RIM believes it can identify more than 1 billion tonnes of beneficiable magnetite iron ore on the tenements. They are close to a new railway linking to a new open access deep water port being paid for by the Brazilian government.

The aim is to complete a bankable feasibility study by the end of next year, leading into a two-year construction period. First production would then take place in early 2015.

RIM is probably best known for advising China Railway Materials Corp on its investment in Pilbara iron ore explorer
United
Minerals Corp in 2008. UMC was later taken over by
BHP
Billiton.

RIM will change its name to Cabral Resources after successful completion of the capital raising.